Wednesday, September 26, 2007

BANZAI!

GM gets a breather – and maybe will go BANZAI!

 Yes, today reports poured in about the deal between GM and UAW and the consequent strike call-off.  The top management at GM must have sighed with relief, now that the possibility of a long strike by UAW has been evaded.  Surely, this event does seem like the harbinger of the much awaited conducive environment for GM.  The creation of a trust for managing retiree health benefits would straight away cut about 1500 USD per vehicle sold from GM’s costs.  Hopefully, GM would make the right decisions and divert that money in creating that much more value for customers rather than keep the quality constant, and lower costs further.  A lower costs structure is desirable but is not the “thing” for delivering superior products.  GM can never compete with Kia, Hyundai and Cherry Auto on costs.  They have the engineering muscle to focus on building good products that lure back consumers form the Japanese.  I hope it will be war – BANZAI!

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